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Constitution specifies the amount of social spending Level of spending on education, health and water is specified by the Constitution. Growth rate: 2% plus last year inflation. Labor training, child care, nutrition and other socials programs are financed with payroll taxes. Level of spending is legally mandated.

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Provision of services: Education, health and water are provided in a decentralized fashion. Other programs are still centralized.

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Results: health Health reform in Colombia is considered one most ambitious policy interventions undertaken in Latin America. Health system has been consistently ranked as number one in LAC by the WHO and OPS.

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Main premises of the reform Transformation from a supply-driven system to a demand-driven one. The poor were provided with a voucher that allow them to buy health services through an insurance company. Goals: full coverage and full transformation of resources within ten years.

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Results I: The proportion of poor people with insurance rose from about 5% to about 50%. Use of services increased substantially:

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Results II: Only 20% of resources (“subsidized regime”) go to the public hospitals. The public sector network maintained its original size.

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Comparison: No differences between people with insurance and people without are apparent in: Per capita consumption Birth weight Respiratory diseases Nutrition indicators

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Transfomation AGAIN: The case of SENA: Available evidence suggests inefficiencies: low rate of return. Proposal: separate the financing from the provision, and transform resources from supply to demand.